| TABLE OF CONTENTS | DECEMBER 31, 2018 |
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DISCLOSURES | DECEMBER 31, 2018 |
Forward-Looking Statements
Certain statements contained herein may constitute “forward-looking statements” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties (“JBG SMITH” or the “Company”) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximate”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans”, “would”, “may” or similar expressions in this document. We also note the following forward-looking statements: our annualized net operating income; in the case of our under construction and near-term development assets, estimated square feet, estimated number of units, the estimated completion date, estimated stabilization date, estimated incremental investment, estimated total investment, targeted net operating income yield and estimated stabilized net operating income; and in the case of our future development assets, estimated potential development density, estimated commercial SF/multifamily units to be replaced, estimated remaining acquisition cost, estimated capitalized cost and estimated total investment. We caution you not to place undue reliance on the targeted yields on incremental investment we present in this JBG SMITH Properties Information Package because they are based solely on our estimates, using data available to us in our development underwriting processes. Our estimated initial full year NOI, estimated property related revenue, estimated operating expenses and/or estimated incremental investment may differ substantially from our estimates due to various factors, including unanticipated capital expenditures and other expenses, delays in the estimated start and/or completion date and other contingencies, delays and/or difficulties in completing, leasing and stabilizing these assets, failure to obtain estimated occupancy and rental rates, inability to collect anticipated rental revenues, tenant bankruptcies and unanticipated expenses at these assets that we cannot pass on to tenants. We can provide no assurance that the initial yields on estimated incremental investment we present will be consistent with the targeted NOI yields on estimated incremental investment set forth in this JBG SMITH Properties Information Package. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors.
For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties, see “Risk Factors” and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and other periodic reports the Company files with the Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the issuance of this JBG SMITH Properties Information Package.
Organization and Basis of Presentation
JBG SMITH was formed by Vornado Realty Trust (“Vornado”) for the purpose of receiving via the spin-off on July 17, 2017, substantially all of the assets and liabilities of Vornado’s Washington, DC segment, which operated as Vornado / Charles E. Smith, (the “Vornado Included Assets”). On July 18, 2017, JBG SMITH acquired the management business and certain assets (the “JBG Assets”) of The JBG Companies (“JBG”). The spin-off from Vornado and combination with JBG are collectively referred to as the "Formation Transaction." The Vornado Included Assets are considered the accounting predecessor. As a result, the financial results of the JBG Assets are only included in the combined company’s financial statements from July 18, 2017 forward and are not reflected in the combined company’s historical financial statements for any prior period. Consequently, our results for the periods before and after the Formation Transaction are not directly comparable. We believe, however, that presenting certain supplemental adjusted financial and operational information at the property-level that is "adjusted" to include the results of the JBG Assets for periods prior to the acquisition date may be useful to investors. No other adjustments have been made to this supplemental adjusted information, which is purely informational and does not purport to be indicative of what would have happened had the acquisition of the JBG Assets occurred at the beginning of the periods presented.
The information contained in this JBG SMITH Properties Information Package does not purport to disclose all items required by the accounting principles generally accepted in the United States of America (“GAAP”) and is unaudited information, unless otherwise indicated.
Pro Rata Information
We present certain financial information and metrics in this JBG SMITH Properties Information Package “at JBG SMITH Share,” which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, “real estate ventures”) as applied to these financial measures and metrics. Financial information “at JBG SMITH Share” is calculated on an asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset’s financial information. “At JBG SMITH Share” information, which we also refer to as being “at share,” “our pro rata share” or “our share,” is not, and is not intended to be, a presentation in accordance with GAAP. Given that a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable information regarding a significant component of our portfolio, its composition, performance and capitalization.
We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers’ share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.
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DISCLOSURES | DECEMBER 31, 2018 |
With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers’ interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, the non-GAAP “at JBG SMITH Share” financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.
For complete financial statements, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
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RECENT DEVELOPMENTS | DECEMBER 31, 2018 |
Amazon.com ("Amazon") has selected sites that we own in National Landing as the location of an additional headquarters ("Amazon HQ2"). Amazon has executed three initial leases totaling 537,000 square feet at three existing JBG SMITH office buildings in National Landing. The leases encompass approximately 88,000 square feet at 241 18th Street South, approximately 191,000 square feet at 1800 South Bell Street, and approximately 258,000 square feet at 1770 Crystal Drive. JBG SMITH expects Amazon to begin moving into 241 18th Street South and 1800 South Bell in 2019, and 1770 Crystal Drive by the end of 2020.
JBG SMITH and Amazon have also executed purchase and sale agreements for two of JBG SMITH’s National Landing development sites, Pen Place and Met 6, 7, and 8, which will serve as the initial phase of new construction associated with Amazon’s HQ2. Subject to customary closing conditions, Amazon will pay $294 million for the sites, or $72 per square foot based on their combined development potential of 4.1 million square feet. JBG SMITH expects to close on the Mets land sale as early as 2019 and on Pen Place as early as 2020.
In February 2019, the Commonwealth of Virginia enacted an incentives bill (the “Virginia Government Incentive Package”), which provides tax incentives to Amazon as it creates up to 37,850 full-time jobs with average salaries of $150,000 or higher in National Landing. As part of the incentive package, we expect $1.8 billion in infrastructure and education investments led by state and local governments.
Amazon has publicly stated that it intends to bring more than 25,000 knowledge worker positions to the area, with an average wage over $150,000 and plans to make a capital investment of approximately $2.5 billion in Amazon HQ2. The Virginia Government Incentive Package includes commitments to invest up to $295 million of non‑general fund money in transportation projects that will improve mobility in the region, including additional entrances to the Metro stations at Crystal Drive and the planned Potomac Yard station, improvements to Route 1, a connector bridge from National Landing to Washington National Airport, and a transitway expansion supporting National Landing. In addition, to the Commonwealth’s investments, Arlington County and the City of Alexandria have announced that they plan to fund over $570 million for transportation projects, including rail connections, transit facilities, multi‑modal streets, and corridor connectivity serving the site.
Virginia has also announced it will partner with university philanthropic funds to make performance‑based investments of up to $925 million over 20 years for degrees in computer science and related fields at George Mason University’s Arlington campus and for Virginia Tech to establish a new Innovation Campus in Alexandria.
The Company can provide no assurance that the selection of National Landing as an additional Amazon headquarters will result in the Company benefiting from the anticipated collateral financial effect associated with that selection. See “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
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| NOI RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2018 (Unaudited) |
| dollars in thousands | Three Months Ended December 31, 2018 | Year Ended December 31, 2018 | |||||
| Net income attributable to common shareholders | $ | 710 | $ | 39,924 | |||
| Add: | |||||||
| Depreciation and amortization expense | 67,556 | 211,436 | |||||
| General and administrative expense: | |||||||
| Corporate and other | 8,512 | 33,728 | |||||
| Third-party real estate services | 25,274 | 89,826 | |||||
| Share-based compensation related to Formation Transaction and special equity awards | 9,118 | 36,030 | |||||
| Transaction and other costs | 15,572 | 27,706 | |||||
| Interest expense | 18,184 | 74,447 | |||||
| Loss on extinguishment of debt | 617 | 5,153 | |||||
| Reduction of gain on bargain purchase | — | 7,606 | |||||
| Income tax expense (benefit) | 698 | (738 | ) | ||||
| Net loss attributable to redeemable noncontrolling interests | 178 | 6,710 | |||||
| Less: | |||||||
| Third-party real estate services, including reimbursements | 26,421 | 98,699 | |||||
| Other income | 1,454 | 6,358 | |||||
| Income from unconsolidated real estate ventures, net | 23,991 | 39,409 | |||||
| Interest and other income, net | 9,991 | 15,168 | |||||
| Gain on sale of real estate | 6,394 | 52,183 | |||||
| Net (income) loss attributable to noncontrolling interests | (106 | ) | 21 | ||||
| Consolidated NOI | 78,274 | 319,990 | |||||
NOI attributable to consolidated JBG Assets (1) | — | — | |||||
Proportionate NOI attributable to unconsolidated JBG Assets (1) | — | — | |||||
| Proportionate NOI attributable to unconsolidated real estate ventures | 8,847 | 36,824 | |||||
Non-cash rent adjustments (2) | (6,691 | ) | (10,349 | ) | |||
Other adjustments (3) | 5,110 | 19,638 | |||||
| Total adjustments | 7,266 | 46,113 | |||||
| NOI | $ | 85,540 | $ | 366,103 | |||
Non-same store NOI (4) | 8,742 | 115,801 | |||||
Same store NOI (5) | $ | 76,798 | $ | 250,302 | |||
| Number of properties in same store pool | 57 | 32 | |||||
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| (1) | Includes financial information for the JBG Assets as if the July 18, 2017 acquisition of the JBG Assets had been completed as of the beginning of the period presented. |
| (2) | Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (3) | Adjustment to include other income and payments associated with assumed lease liabilities related to operating properties, and exclude incidental income generated by development assets and commercial lease termination revenue. Includes property management fees of $4.1 million for the three months ended December 31, 2018 and $16.6 million for the year ended December 31, 2018. |
| (4) | Includes the results for properties that were not owned, operated and in service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. |
| (5) | Includes the results of the properties that are owned, operated and in service for the entirety of both periods being compared except for properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. |
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| EBITDA, EBITDAre AND ADJUSTED EBITDA (NON-GAAP) | DECEMBER 31, 2018 (Unaudited) |
| dollars in thousands | Three Months Ended December 31, 2018 | Year Ended December 31, 2018 | ||||||
| EBITDA, EBITDAre and Adjusted EBITDA | ||||||||
| Net income | $ | 994 | $ | 46,613 | ||||
| Depreciation and amortization expense | 67,556 | 211,436 | ||||||
Interest expense (1) | 18,184 | 74,447 | ||||||
| Income tax benefit (expense) | 698 | (738 | ) | |||||
| Unconsolidated real estate ventures allocated share of above adjustments | 10,253 | 42,016 | ||||||
| Allocated share of above adjustments to noncontrolling interests in consolidated real estate ventures | (182 | ) | (53 | ) | ||||
| EBITDA | $ | 97,503 | $ | 373,721 | ||||
| Gain on sale of real estate | (6,394 | ) | (52,183 | ) | ||||
| Gain on sale of unconsolidated real estate assets | (20,554 | ) | (36,042 | ) | ||||
| EBITDAre | $ | 70,555 | $ | 285,496 | ||||
Transaction and other costs (2) | 15,572 | 27,706 | ||||||
| Loss on extinguishment of debt | 617 | 5,153 | ||||||
| Reduction of gain on bargain purchase | — | 7,606 | ||||||
| Share-based compensation related to Formation Transaction and special equity awards | 9,118 | 36,030 | ||||||
Distributions in excess of our net investment in unconsolidated real estate venture (3) | (7,374 | ) | (13,676 | ) | ||||
| Unconsolidated real estate ventures allocated share of above adjustments | 1,542 | 1,572 | ||||||
| Lease liability adjustments | (7,422 | ) | (9,965 | ) | ||||
| Allocated share of above adjustments to noncontrolling interests in consolidated real estate ventures | — | (124 | ) | |||||
| Adjusted EBITDA | $ | 82,608 | $ | 339,798 | ||||
Net Debt to Adjusted EBITDA (4) | 6.5x | 6.3x | ||||||
| December 31, 2018 | ||||||||
| Net Debt (at JBG SMITH Share) | ||||||||
Consolidated indebtedness (5) | $ | 2,130,704 | ||||||
Unconsolidated indebtedness (5) | 298,588 | |||||||
| Total consolidated and unconsolidated indebtedness | 2,429,292 | |||||||
| Less: cash and cash equivalents | 273,611 | |||||||
| Net Debt (at JBG SMITH Share) | �� | $ | 2,155,681 | |||||
| $ | — | |||||||
____________________
| (1) | Interest expense includes the amortization of deferred financing costs and the marking to market of interest rate swaps and caps, net of capitalized interest. |
| (2) | Includes fees and expenses incurred in connection with the Formation Transaction (including transition services provided by our former parent, integration costs and severance costs), costs related to the pursuit of Amazon HQ2, and costs related to other completed, potential and pursued transactions. |
| (3) | Related to our investment in the real estate venture that owns 1101 17th Street. In June 2018, the mortgage loan payable that was collateralized by 1101 17th Street was refinanced eliminating the principal guaranty provisions that had been included in the prior loan. At the time of refinancing, distributions and our share of the cumulative earnings of the venture exceeded our investment in the venture by $5.4 million, which resulted in a negative investment balance. After the elimination of the principal guaranty provisions in the prior mortgage loan, we recognized the $5.4 million negative investment balance as income within “Income from unconsolidated real estate ventures, net” in our statements of operations for the year ended December 31, 2018, which results in a zero investment balance in the real estate venture that owns 1101 17th Street in our balance sheet as of December 31, 2018. We have also suspended the equity method of accounting for this venture and recognized as income in the three months and year ended December 31, 2018, $7.4 million and $8.3 million related to cash distributions. |
| (4) | Adjusted EBITDA for the three months ended December 31, 2018 is annualized by multiplying by four. |
| (5) | Net of premium/discount and deferred financing costs. |
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PORTFOLIO OVERVIEW | DECEMBER 31, 2018 (Unaudited) |
| 100% Share | At JBG SMITH Share | ||||||||||||||||||||||
| Number of Assets | Square Feet/Units | Square Feet/Units | % Leased | % Occupied | Annualized Rent (in thousands) | Annualized Rent per Square Foot/Monthly Rent Per Unit (1) | |||||||||||||||||
| Operating | |||||||||||||||||||||||
Commercial (2) | |||||||||||||||||||||||
| In service | 45 | 12,381,927 | 10,741,949 | 89.4 | % | 85.1 | % | $ | 387,182 | $ | 43.43 | ||||||||||||
| Recently delivered | 1 | 552,540 | 552,540 | 93.0 | % | 92.6 | % | 30,780 | 61.39 | ||||||||||||||
| Total / weighted average | 46 | 12,934,467 | 11,294,489 | 89.6 | % | 85.5 | % | $ | 417,962 | $ | 44.44 | ||||||||||||
| Multifamily | |||||||||||||||||||||||
| In service | 15 | 6,024 | 4,240 | 96.5 | % | 94.9 | % | $ | 106,349 | $ | 2,123 | ||||||||||||
| Recently delivered | 1 | 291 | 291 | 83.1 | % | 80.4 | % | 7,649 | 2,392 | ||||||||||||||
| Total / weighted average | 16 | 6,315 | 4,531 | 95.7 | % | 93.9 | % | $ | 113,998 | $ | 2,138 | ||||||||||||
| Operating - Total / Weighted Average | 62 | 12,934,467 SF/ 6,315 Units | 11,294,489 SF/ 4,531 Units | 91.2 | % | 87.7 | % | $ | 531,960 | $44.44 per SF/ $2,138 per unit | |||||||||||||
Development (3) | |||||||||||||||||||||||
| Under Construction | |||||||||||||||||||||||
Commercial (4) | 5 | 1,158,429 | 926,530 | 49.5 | % | ||||||||||||||||||
| Multifamily | 4 | 1,476 | 1,298 | N/A | |||||||||||||||||||
| Development - Total | 9 | 1,158,429 SF/ 1,476 Units | 926,530 SF/ 1,298 Units | 49.5 | % | ||||||||||||||||||
| Future Development | 41 | 23,071,000 | 19,628,300 | ||||||||||||||||||||
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| (1) | For commercial assets, represents annualized office rent divided by occupied office square feet; annualized retail rent and retail square feet are excluded from this metric. For multifamily assets, represents monthly multifamily rent divided by occupied units; retail rent is excluded from this metric. The Crystal City Marriott and 1700 M Street are excluded from annualized rent per square foot metrics. Occupied square footage may differ from leased square footage because leased square footage includes leases that have been signed but have not yet commenced. |
| (2) | Includes the Crystal City Marriott and 1700 M Street. The Crystal City Marriott and 1700 M Street are excluded from percent leased, percent occupied, annualized rent, and annualized rent per square foot metrics. |
| (3) | Refer to pages 16-17 for detail on under construction and future development assets. |
| (4) | Includes JBG SMITH’s lease for approximately 84,400 square feet at 4747 Bethesda Avenue. |
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| PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2018 (Unaudited) |
| Commercial Assets | Submarket | % Ownership | C/U (1) | Same Store (2): Q4 2017-2018 / YTD 2017-2018 | Year Built / Renovated | Total Square Feet | Office Square Feet | Retail Square Feet | % Leased | Office % Occupied | Retail % Occupied | Annualized Rent (in thousands) | Office Annualized Rent Per Square Foot (3) | Retail Annualized Rent Per Square Foot (4) | |||||||||||||
| DC | |||||||||||||||||||||||||||
| Universal Buildings | Uptown | 100.0 | % | C | Y / Y | 1956 / 1990 | 659,965 | 568,890 | 91,075 | 98.2 | % | 98.0 | % | 99.6 | % | $ | 31,895 | $ | 48.55 | $ | 53.19 | ||||||
| 2101 L Street | CBD | 100.0 | % | C | Y / Y | 1975 / 2007 | 378,660 | 347,340 | 31,320 | 98.4 | % | 99.0 | % | 92.6 | % | 23,592 | 63.94 | 55.60 | |||||||||
1730 M Street (5) | CBD | 100.0 | % | C | Y / Y | 1964 / 1998 | 204,736 | 196,718 | 8,018 | 88.9 | % | 87.0 | % | 100.0 | % | 8,667 | 48.34 | 49.27 | |||||||||
| 1600 K Street | CBD | 100.0 | % | C | Y / N | 1950 / 2000 | 82,011 | 69,620 | 12,391 | 98.6 | % | 98.3 | % | 100.0 | % | 4,316 | 51.19 | 65.58 | |||||||||
1700 M Street (6) | CBD | 100.0 | % | C | N / N | N/A | 34,000 | — | — | — | — | — | — | — | — | ||||||||||||
L’Enfant Plaza Office-East (5) | Southwest | 49.0 | % | U | Y / N | 1972 / 2012 | 397,057 | 397,057 | — | 90.8 | % | 90.8 | % | — | 16,782 | 46.53 | — | ||||||||||
| L’Enfant Plaza Office-North | Southwest | 49.0 | % | U | Y / N | 1969 / 2014 | 299,476 | 280,002 | 19,474 | 95.1 | % | 84.2 | % | 85.9 | % | 11,524 | 47.71 | 16.56 | |||||||||
L’Enfant Plaza Retail (5) | Southwest | 49.0 | % | U | Y / N | 1968 / 2014 | 119,361 | 16,596 | 102,765 | 82.6 | % | 100.0 | % | 79.8 | % | 4,909 | 36.36 | 52.53 | |||||||||
| The Foundry | Georgetown | 9.9 | % | U | Y / N | 1973 / 2017 | 223,359 | 216,505 | 6,854 | 83.2 | % | 76.4 | % | 100.0 | % | 7,929 | 46.26 | 40.88 | |||||||||
| 1101 17th Street | CBD | 55.0 | % | U | Y / Y | 1964 / 1999 | 210,730 | 200,972 | 9,758 | 82.7 | % | 82.7 | % | 82.7 | % | 9,005 | 50.90 | 67.76 | |||||||||
| VA | |||||||||||||||||||||||||||
Courthouse Plaza 1 and 2 (5) | Clarendon/Courthouse | 100.0 | % | C | Y / Y | 1989 / 2013 | 633,256 | 576,063 | 57,193 | 85.1 | % | 83.6 | % | 100.0 | % | $ | 23,190 | $ | 44.05 | $ | 34.65 | ||||||
| 2121 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1985 / 2006 | 505,754 | 505,349 | 405 | 95.3 | % | 95.3 | % | — | 23,408 | 48.58 | — | ||||||||||
| 2345 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1988 / N/A | 502,526 | 498,320 | 4,206 | 77.7 | % | 77.5 | % | 100.0 | % | 17,895 | 45.97 | 31.96 | |||||||||
| 2231 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1987 / 2009 | 467,040 | 416,080 | 50,960 | 87.3 | % | 83.9 | % | 100.0 | % | 17,215 | 43.98 | 36.46 | |||||||||
1550 Crystal Drive (7) | National Landing | 100.0 | % | C | Y / Y | 1980 / 2001 | 451,037 | 451,037 | — | 96.0 | % | 81.4 | % | — | 14,592 | 39.73 | — | ||||||||||
RTC-West (7) | Reston | 100.0 | % | C | Y / N | 1988 / 2014 | 435,998 | 435,998 | — | 88.8 | % | 88.8 | % | — | 14,831 | 38.33 | — | ||||||||||
| RTC-West Retail | Reston | 100.0 | % | C | N / N | 2017 / N/A | 40,025 | — | 40,025 | 91.9 | % | — | 91.9 | % | 2,463 | — | 66.94 | ||||||||||
| 2011 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1984 / 2006 | 440,046 | 433,284 | 6,762 | 90.9 | % | 82.7 | % | 49.7 | % | 16,381 | 45.19 | 57.44 | |||||||||
| 2451 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1990 / N/A | 398,329 | 386,639 | 11,690 | 72.9 | % | 72.1 | % | 100.0 | % | 12,109 | 41.97 | 35.42 | |||||||||
Commerce Executive (7) (8) | Reston | 100.0 | % | C | Y / Y | 1987 / 2015 | 388,562 | 372,302 | 16,260 | 89.4 | % | 84.3 | % | 95.2 | % | 11,811 | 36.24 | 28.30 | |||||||||
| 1235 S. Clark Street | National Landing | 100.0 | % | C | Y / Y | 1981 / 2007 | 384,032 | 335,686 | 48,346 | 85.3 | % | 83.2 | % | 100.0 | % | 12,602 | 41.69 | 19.80 | |||||||||
241 18th Street S. (9) | National Landing | 100.0 | % | C | Y / Y | 1977 / 2013 | 357,685 | 331,195 | 26,490 | 79.0 | % | 72.4 | % | 91.5 | % | 9,903 | 38.45 | 28.02 | |||||||||
| 251 18th Street S. | National Landing | 100.0 | % | C | Y / Y | 1975 / 2013 | 342,155 | 292,984 | 49,171 | 99.4 | % | 100.0 | % | 96.2 | % | 13,901 | 41.29 | 38.16 | |||||||||
| 1215 S. Clark Street | National Landing | 100.0 | % | C | Y / Y | 1983 / 2002 | 336,159 | 333,546 | 2,613 | 100.0 | % | 100.0 | % | 100.0 | % | 10,862 | 32.31 | 32.83 | |||||||||
| 201 12th Street S. | National Landing | 100.0 | % | C | Y / Y | 1987 / N/A | 329,903 | 318,778 | 11,125 | 90.5 | % | 87.8 | % | 100.0 | % | 10,503 | 35.86 | 41.37 | |||||||||
| 800 North Glebe Road | Ballston | 100.0 | % | C | Y / N | 2012 / N/A | 303,644 | 277,397 | 26,247 | 100.0 | % | 100.0 | % | 100.0 | % | 15,771 | 52.43 | 46.79 | |||||||||
| 2200 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1968 / 2006 | 282,920 | 282,920 | — | 70.6 | % | 44.8 | % | — | 4,838 | 38.21 | — | ||||||||||
| 1901 South Bell Street | National Landing | 100.0 | % | C | Y / Y | 1968 / 2008 | 277,003 | 275,079 | 1,924 | 100.0 | % | 100.0 | % | 100.0 | % | 11,009 | 40.00 | 2.26 | |||||||||
| 1225 S. Clark Street | National Landing | 100.0 | % | C | Y / Y | 1982 / 2013 | 276,952 | 264,102 | 12,850 | 92.4 | % | 47.1 | % | 100.0 | % | 4,905 | 37.46 | 19.35 | |||||||||
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| PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2018 (Unaudited) |
| Commercial Assets | Submarket | % Ownership | C/U (1) | Same Store (2): Q4 2017-2018 / YTD 2017-2018 | Year Built / Renovated | Total Square Feet | Office Square Feet | Retail Square Feet | % Leased | Office % Occupied | Retail % Occupied | Annualized Rent (in thousands) | Office Annualized Rent Per Square Foot (3) | Retail Annualized Rent Per Square Foot (4) | |||||||||||||
| Crystal City Marriott (345 Rooms) | National Landing | 100.0 | % | C | Y / Y | 1968 / 2013 | 266,000 | — | — | — | — | — | $ | — | $ | — | $ | — | |||||||||
| 2100 Crystal Drive | National Landing | 100.0 | % | C | Y / Y | 1968 / 2006 | 249,281 | 249,281 | — | 98.8 | % | 98.8 | % | — | 10,170 | 41.31 | — | ||||||||||
| 200 12th Street S. | National Landing | 100.0 | % | C | Y / Y | 1985 / 2013 | 202,736 | 202,736 | — | 86.7 | % | 86.7 | % | — | 7,871 | 44.78 | — | ||||||||||
| 2001 Jefferson Davis Highway | National Landing | 100.0 | % | C | Y / Y | 1967 / N/A | 159,838 | 159,838 | — | 67.3 | % | 64.0 | % | — | 3,509 | 34.31 | — | ||||||||||
1800 South Bell Street (7) (9) | National Landing | 100.0 | % | C | N / N | 1969 / 2007 | 69,621 | 45,142 | 24,479 | 100.0 | % | 100.0 | % | 100.0 | % | 2,438 | 48.80 | 9.61 | |||||||||
| Crystal City Shops at 2100 | National Landing | 100.0 | % | C | Y / Y | 1968 / 2006 | 59,574 | — | 59,574 | 91.2 | % | — | 91.2 | % | 948 | — | 17.44 | ||||||||||
| Crystal Drive Retail | National Landing | 100.0 | % | C | Y / Y | 2003 / N/A | 56,965 | — | 56,965 | 97.3 | % | — | 97.3 | % | 2,951 | — | 53.27 | ||||||||||
| Vienna Retail* | Vienna | 100.0 | % | C | Y / Y | 1981 / N/A | 8,584 | — | 8,584 | 100.0 | % | — | 100.0 | % | 420 | — | 48.94 | ||||||||||
| Stonebridge at Potomac Town Center* | Prince William County | 10.0 | % | U | Y / N | 2012 / N/A | 503,683 | — | 503,683 | 94.4 | % | — | 93.9 | % | 15,629 | — | 33.06 | ||||||||||
| Pickett Industrial Park | Eisenhower Avenue | 10.0 | % | U | Y / N | 1973 / N/A | 246,145 | 246,145 | — | 100.0 | % | 100.0 | % | — | 3,860 | 15.68 | — | ||||||||||
| Rosslyn Gateway-North | Rosslyn | 18.0 | % | U | Y / N | 1996 / 2014 | 143,676 | 130,922 | 12,754 | 80.8 | % | 79.3 | % | 96.0 | % | 4,610 | 41.02 | 28.69 | |||||||||
| Rosslyn Gateway-South | Rosslyn | 18.0 | % | U | Y / N | 1961 / N/A | 102,061 | 94,477 | 7,584 | 84.9 | % | 87.5 | % | 40.4 | % | 2,240 | 25.43 | 44.75 | |||||||||
| MD | |||||||||||||||||||||||||||
| 7200 Wisconsin Avenue | Bethesda CBD | 100.0 | % | C | Y / N | 1986 / 2015 | 267,602 | 250,650 | 16,952 | 72.6 | % | 70.7 | % | 80.8 | % | $ | 9,103 | $ | 47.44 | $ | 50.69 | ||||||
One Democracy Plaza* (5) | Bethesda‑Rock Spring | 100.0 | % | C | Y / Y | 1987 / 2013 | 213,131 | 210,993 | 2,138 | 96.8 | % | 94.8 | % | 100.0 | % | 6,505 | 32.19 | 30.20 | |||||||||
| 4749 Bethesda Avenue Retail | Bethesda CBD | 100.0 | % | C | Y / N | 2016 / N/A | 7,999 | — | 7,999 | 47.9 | % | — | 47.9 | % | 1,011 | — | 264.00 | ||||||||||
| 11333 Woodglen Drive | Rockville Pike Corridor | 18.0 | % | U | Y / N | 2004 / N/A | 62,650 | 54,077 | 8,573 | 97.6 | % | 97.2 | % | 100.0 | % | 2,249 | 35.63 | 43.82 | |||||||||
| Total / Weighted Average | 12,381,927 | 10,724,720 | 1,357,207 | 89.6 | % | 85.3 | % | 93.4 | % | $ | 440,322 | $ | 42.79 | $ | 38.53 | ||||||||||||
| Recently Delivered | |||||||||||||||||||||||||||
| VA | |||||||||||||||||||||||||||
CEB Tower at Central Place (5) | Rosslyn | 100.0 | % | C | N / N | 2018 / N/A | 552,540 | 524,537 | 28,003 | 93.0 | % | 92.6 | % | 100.0 | % | 30,780 | 61.39 | 34.12 | |||||||||
| Operating - Total / Weighted Average | 12,934,467 | 11,249,257 | 1,385,210 | 89.8 | % | 85.7 | % | 93.5 | % | $ | 471,102 | $ | 43.72 | $ | 38.43 | ||||||||||||
| Page 10 | |
| PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2018 (Unaudited) |
| Commercial Assets | Submarket | % Ownership | C/U (1) | Same Store (2): Q4 2017-2018 / YTD 2017-2018 | Year Built / Renovated | Total Square Feet | Office Square Feet | Retail Square Feet | % Leased | Office % Occupied | Retail % Occupied | Annualized Rent (in thousands) | Office Annualized Rent Per Square Foot (3) | Retail Annualized Rent Per Square Foot (4) | |||||||||||||
| Under Construction | |||||||||||||||||||||||||||
| DC | |||||||||||||||||||||||||||
1900 N Street (5) (10) | CBD | 55.0 | % | U | 271,433 | 258,931 | 12,502 | 65.2 | % | ||||||||||||||||||
| L’Enfant Plaza Office-Southeast | Southwest | 49.0 | % | U | 215,185 | 215,185 | — | 74.3 | % | ||||||||||||||||||
| VA | |||||||||||||||||||||||||||
1770 Crystal Drive (9) (11) | National Landing | 100.0 | % | C | 271,572 | 258,299 | 13,273 | 2.7 | % | ||||||||||||||||||
| Central District Retail | National Landing | 100.0 | % | C | 108,825 | — | 108,825 | 45.0 | % | ||||||||||||||||||
| MD | |||||||||||||||||||||||||||
4747 Bethesda Avenue (12) | Bethesda CBD | 100.0 | % | C | 291,414 | 285,251 | 6,163 | 77.7 | % | ||||||||||||||||||
| Under Construction - Total / Weighted Average | 1,158,429 | 1,017,666 | 140,763 | 53.5 | % | ||||||||||||||||||||||
| Total / Weighted Average | 14,092,896 | 12,266,923 | 1,525,973 | 86.7 | % | ||||||||||||||||||||||
| Totals at JBG SMITH Share | |||||||||||||||||||||||||||
| In service assets | 10,741,949 | 9,634,679 | 807,270 | 89.4 | % | 85.1 | % | 94.4 | % | $ | 387,182 | $ | 43.43 | $ | 40.96 | ||||||||||||
| Recently delivered assets | 552,540 | 524,537 | 28,003 | 93.0 | % | 92.6 | % | 100.0 | % | 30,780 | 61.39 | 34.12 | |||||||||||||||
| Operating assets | 11,294,489 | 10,159,216 | 835,273 | 89.6 | % | 85.5 | % | 94.6 | % | 417,962 | 44.44 | 40.72 | |||||||||||||||
| Under construction assets | 926,530 | 791,392 | 135,137 | 49.5 | % | ||||||||||||||||||||||
| 1,174,626.9 | |||||||||||||||||||||||||||
| Number of Assets and Total Square Feet Reconciliation | |||||||||
| Number of Assets | At 100% Share | At JBG SMITH Share | |||||||
| Operating Assets | Square Feet | Square Feet | |||||||
| Q3 2018 | 49 | 13,729,973 | 11,794,866 | ||||||
Placed into service (5) | 1 | 34,000 | 34,000 | ||||||
Dispositions (13) | (2 | ) | (733,137 | ) | (470,583 | ) | |||
Out-of-service adjustment (14) | (2 | ) | (93,394 | ) | (60,728 | ) | |||
| Building re-measurements | — | (2,975 | ) | (3,066 | ) | ||||
| Q4 2018 | 46 | 12,934,467 | 11,294,489 | ||||||
See footnotes on page 12.
| Page 11 | |
| PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2018 (Unaudited) |
Footnotes
Note: At 100% share, unless otherwise noted. Excludes our 10% subordinated interest in three commercial buildings held through a real estate venture in which we have no economic interest.
* Not Metro-Served.
| (1) | “C” denotes a consolidated interest. “U” denotes an unconsolidated interest. |
| (2) | “Y” denotes an asset as same store and “N” denotes an asset as non-same store. |
| (3) | Represents annualized office rent divided by occupied office square feet; annualized retail rent and retail square feet are excluded from this metric. Occupied office square footage may differ from leased office square footage because leased office square footage includes leases that have been signed but have not yet commenced. |
| (4) | Represents annualized retail rent divided by occupied retail square feet. Occupied retail square footage may differ from leased retail square footage because leased retail square footage includes leases that have been signed but have not yet commenced. |
| (5) | The following assets are subject to ground leases: |
| Commercial Asset | Ground Lease Expiration Date | |
| 1730 M Street | 4/30/2061 | |
| L'Enfant Plaza Office - East | 11/23/2064 | |
| L'Enfant Plaza Retail | 11/23/2064 | |
| Courthouse Plaza 1 and 2 | 1/19/2062 | |
| One Democracy Plaza | 11/17/2084 | |
| CEB Tower at Central Place* | 6/2/2102 | |
| 1900 N Street** | 5/31/2106 | |
* We have an option to purchase the ground lease at a fixed price.
** Only a portion of the asset is subject to a ground lease.
| (6) | In December 2018, we sold a 99-year term leasehold interest in 1700 M Street. 1700 M Street is a 34,000 square foot development site located in the CBD submarket of Washington, DC. JBG SMITH will retain the fee ownership of the land. |
| (7) | The following assets contain space that is held for development or not otherwise available for lease. This out-of-service square footage is excluded from area, leased, and occupancy metrics in the above table. |
| Commercial Asset | In-Service | Not Available for Lease | |||
| 1550 Crystal Drive | 451,037 | 43,655 | |||
| RTC - West | 435,998 | 17,988 | |||
| Commerce Executive | 388,562 | 14,085 | |||
| 1800 South Bell Street | 69,621 | 150,321 | |||
| (8) | In February 2019, we sold Commerce Executive for $115.0 million |
| (9) | Amazon is expected to lease approximately 88,000 square feet at 241 18th Street S and approximately 191,000 at 1800 South Bell Street. Together with the expected lease of approximately 258,000 square feet at 1770 Crystal Drive, these expected leases total approximately 537,000 square feet and are expected to generate a combined net effective rent of approximately $35 per square foot. |
| (10) | Ownership percentage reflects expected dilution of JBG SMITH as contributions are funded during the construction of the asset. As of December 31, 2018, JBG SMITH's ownership interest was 68.5%. |
| (11) | Amazon has executed a lease for 258,299 square feet at 1770 Crystal Drive. With this lease, the asset is 97.8% pre-leased, and the pre-leased status of our total under construction portfolio is 75.8% (77.4% at our share). |
| (12) | Includes JBG SMITH’s lease for approximately 84,400 square feet. |
| (13) | In October 2018, we sold 1233 20th Street for $65.0 million. In December 2018, our unconsolidated real estate venture sold The Warner for a sales price of $376.5 million. |
| (14) | Wiehle Avenue Office Building and NoBe II Office were taken out of service in Q4 2018. |
| Page 12 | |
| PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2018 (Unaudited) |
| Multifamily Assets | Submarket | % Ownership | C/U (1) | Same Store (2): Q4 2017-2018 / YTD 2017-2018 | Year Built / Renovated | Number of Units | Total Square Feet | Multifamily Square Feet | Retail Square Feet | % Leased | Multifamily % Occupied | Retail % Occupied | Annualized Rent (in thousands) | Monthly Rent Per Unit (3) (4) | Monthly Rent Per Square Foot (4) (5) | ||||||||||||||
| DC | |||||||||||||||||||||||||||||
| Fort Totten Square | Brookland/Fort Totten | 100.0 | % | C | Y / N | 2015 / N/A | 345 | 384,316 | 253,652 | 130,664 | 98.6 | % | 95.9 | % | 100.0 | % | $ | 9,136 | $ | 1,757 | $ | 2.39 | |||||||
| WestEnd25 | West End | 100.0 | % | C | Y / Y | 2009 / N/A | 283 | 273,264 | 273,264 | — | 96.5 | % | 95.8 | % | — | 11,245 | 3,458 | 3.58 | |||||||||||
| North End Retail | U Street/Shaw | 100.0 | % | C | Y / N | 2015 / N/A | — | 27,355 | — | 27,355 | 100.0 | % | N/A | 100.0 | % | 1,403 | N/A | N/A | |||||||||||
| The Gale Eckington | H Street/NoMa | 5.0 | % | U | Y / N | 2013 / 2017 | 603 | 466,716 | 465,516 | 1,200 | 91.9 | % | 90.2 | % | 100.0 | % | 13,347 | 2,039 | 2.64 | ||||||||||
| Atlantic Plumbing | U Street/Shaw | 64.0 | % | U | Y / N | 2015 / N/A | 310 | 245,527 | 221,788 | 23,739 | 96.0 | % | 93.9 | % | 100.0 | % | 10,052 | 2,560 | 3.58 | ||||||||||
| VA | |||||||||||||||||||||||||||||
| RiverHouse Apartments | National Landing | 100.0 | % | C | Y / Y | 1960 / 2013 | 1,670 | 1,322,016 | 1,319,354 | 2,662 | 95.6 | % | 94.1 | % | 100.0 | % | $ | 33,540 | $ | 1,774 | $ | 2.25 | |||||||
| The Bartlett | National Landing | 100.0 | % | C | Y / N | 2016 / N/A | 699 | 619,372 | 577,295 | 42,077 | 95.7 | % | 93.6 | % | 100.0 | % | 22,291 | 2,671 | 3.23 | ||||||||||
| 220 20th Street | National Landing | 100.0 | % | C | Y / Y | 2009 / N/A | 265 | 271,476 | 269,913 | 1,563 | 97.4 | % | 95.8 | % | 100.0 | % | 7,979 | 2,603 | 2.56 | ||||||||||
| 2221 South Clark Street | National Landing | 100.0 | % | C | Y / Y | 1964 / 2016 | 216 | 164,743 | 164,743 | — | 100.0 | % | 100.0 | % | — | 3,516 | N/A | N/A | |||||||||||
| Fairway Apartments* | Reston | 10.0 | % | U | Y / N | 1969 / 2005 | 346 | 370,850 | 370,850 | — | 95.0 | % | 95.1 | % | — | 6,494 | 1,645 | 1.53 | |||||||||||
| MD | |||||||||||||||||||||||||||||
| Falkland Chase-South & West | Downtown Silver Spring | 100.0 | % | C | Y / N | 1938 / 2011 | 268 | 222,949 | 222,949 | — | 98.0 | % | 96.6 | % | — | $ | 5,278 | $ | 1,698 | $ | 2.04 | ||||||||
| Falkland Chase-North | Downtown Silver Spring | 100.0 | % | C | Y / N | 1938 / 1986 | 170 | 112,259 | 112,259 | — | 97.1 | % | 95.3 | % | — | 2,872 | 1,477 | 2.24 | |||||||||||
| Galvan | Rockville Pike Corridor | 1.8 | % | U | Y / N | 2015 / N/A | 356 | 390,641 | 295,033 | 95,608 | 95.9 | % | 94.9 | % | 96.8 | % | 10,816 | 1,786 | 2.15 | ||||||||||
The Alaire (6) | Rockville Pike Corridor | 18.0 | % | U | Y / N | 2010 / N/A | 279 | 266,497 | 251,691 | 14,806 | 94.7 | % | 92.8 | % | 100.0 | % | 5,916 | 1,718 | 1.90 | ||||||||||
The Terano (6) (7) | Rockville Pike Corridor | 1.8 | % | U | Y / N | 2015 / N/A | 214 | 195,864 | 183,496 | 12,368 | 92.4 | % | 91.1 | % | 76.2 | % | 4,366 | 1,744 | 2.03 | ||||||||||
| Total / Weighted Average | 6,024 | 5,333,845 | 4,981,803 | 352,042 | 95.8 | % | 94.2 | % | 98.3 | % | $ | 148,251 | $ | 2,048 | $ | 2.47 | |||||||||||||
Recently Delivered | |||||||||||||||||||||||||||||
| DC | |||||||||||||||||||||||||||||
| 1221 Van Street | Ballpark/Southeast | 100.0 | % | C | N / N | 2018 / N/A | 291 | 225,462 | 202,715 | 22,747 | 83.1 | % | 80.4 | % | 79.8 | % | 7,649 | 2,392 | 3.43 | ||||||||||
| Operating - Total / Weighted Average | 6,315 | 5,559,307 | 5,184,518 | 374,789 | 95.3 | % | 93.6 | % | 97.2 | % | $ | 155,900 | $ | 2,062 | $ | 2.51 | |||||||||||||
| Under Construction | |||||||||||||||||||||||||||||
| DC | |||||||||||||||||||||||||||||
| West Half | Ballpark/Southeast | 100.0 | % | C | 465 | 388,174 | 346,415 | 41,759 | |||||||||||||||||||||
965 Florida Avenue (8) | U Street/Shaw | 96.1 | % | C | 433 | 336,092 | 290,296 | 45,796 | |||||||||||||||||||||
| Atlantic Plumbing C | U Street/Shaw | 100.0 | % | C | 256 | 225,531 | 206,057 | 19,474 | |||||||||||||||||||||
| Page 13 | |
| PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2018 (Unaudited) |
| Multifamily Assets | Submarket | % Ownership | C/U (1) | Same Store (2): Q4 2017-2018 / YTD 2017-2018 | Year Built / Renovated | Number of Units | Total Square Feet | Multifamily Square Feet | Retail Square Feet | % Leased | Multifamily % Occupied | Retail % Occupied | Annualized Rent (in thousands) | Monthly Rent Per Unit (3) (4) | Monthly Rent Per Square Foot (4) (5) | ||||||||||||||
| MD | |||||||||||||||||||||||||||||
| 7900 Wisconsin Avenue | Bethesda CBD | 50.0 | % | U | 322 | 359,025 | 338,990 | 20,035 | |||||||||||||||||||||
| Under Construction - Total | 1,476 | 1,308,822 | 1,181,758 | 127,064 | |||||||||||||||||||||||||
| Total | 7,791 | 6,868,129 | 6,366,276 | 501,853 | |||||||||||||||||||||||||
| Totals at JBG SMITH Share | |||||||||||||||||||||||||||||
| In service assets | 4,240 | 3,673,835 | 3,449,652 | 224,182 | 96.5 | % | 94.9 | % | 100.0 | % | $ | 106,349 | $ | 2,123 | $ | 2.60 | |||||||||||||
| Recently delivered assets | 291 | 225,462 | 202,715 | 22,747 | 83.1 | % | 80.4 | % | 79.8 | % | 7,649 | 2,392 | 3.43 | ||||||||||||||||
| Operating assets | 4,531 | 3,899,297 | 3,652,367 | 246,929 | 95.7 | % | 93.9 | % | 98.1 | % | 113,998 | 2,138 | 2.64 | ||||||||||||||||
| Under construction assets | 1,298 | 1,116,337 | 1,001,058 | 115,279 | |||||||||||||||||||||||||
| Number of Assets and Total Square Feet/Units Reconciliation | |||||||||
| Number of Assets | At 100% Share | At JBG SMITH Share | |||||||
| Operating Assets | Square Feet/Units | Square Feet/Units | |||||||
| Q3 2018 | 16 | 5,554,123 SF/ 6,307 Units | 3,894,113 SF/ 4,523 Units | ||||||
| Placed into service | — | 6,100 SF/ 8 Units | 6,100 SF/ 8 Units | ||||||
| Out-of-service adjustment | — | — | — | ||||||
| Building re-measurements | — | (916) SF | (916) SF | ||||||
| Q4 2018 | 16 | 5,559,307 SF/ 6,315 Units | 3,899,297 SF/ 4,531 Units | ||||||
| Leasing Activity - Multifamily | ||||||||||||||||||||||||||||
| Number of Assets | Number of Units | Monthly Rent Per Unit (3) | Multifamily % Occupied | Annualized Rent (in thousands) | ||||||||||||||||||||||||
| Q4 2018 | Q4 2017 | % Change | Q4 2018 | Q4 2017 | % Change | Q4 2018 | Q4 2017 | % Change | ||||||||||||||||||||
| DC | 4 | 857 | $ | 2,515 | $ | 2,620 | (4.0 | )% | 95.2 | % | 91.3 | % | 3.9 | % | $ | 24,610 | $ | 24,592 | 0.1 | % | ||||||||
| VA | 4 | 2,669 | 2,090 | 2,089 | — | 94.2 | % | 93.8 | % | 0.4 | % | 63,018 | 62,765 | 0.4 | % | |||||||||||||
| MD | 5 | 498 | 1,627 | 1,651 | (1.5 | )% | 95.7 | % | 95.5 | % | 0.2 | % | 9,315 | 9,274 | 0.4 | % | ||||||||||||
| Total / Weighted Average | 13 | 4,024 | $ | 2,123 | $ | 2,145 | (1.0 | )% | 94.6 | % | 93.3 | % | 1.3 | % | $ | 96,943 | $ | 96,631 | 0.3 | % | ||||||||
| Note: At JBG SMITH share. Includes both Vornado Included Assets and JBG Assets placed in service prior to October 1, 2017. | ||||||||||||||||||||||||||||
See footnotes on page 15.
| Page 14 | |
| PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2018 (Unaudited) |
Footnotes
Note: At 100% share.
* Not Metro-Served.
| (1) | “C” denotes a consolidated interest. “U” denotes an unconsolidated interest. |
| (2) | “Y” denotes an asset as same store and “N” denotes an asset as non-same store. |
| (3) | Represents multifamily rent divided by occupied multifamily units; retail rent is excluded from this metric. Occupied units may differ from leased units because leased units include leases that have been signed but have not yet commenced. |
| (4) | Excludes North End Retail and 2221 South Clark Street (WeLive). |
| (5) | Represents multifamily rent divided by occupied multifamily square feet; retail rent and retail square feet are excluded from this metric. Occupied multifamily square footage may differ from leased multifamily square footage because leased multifamily square footage includes leases that have been signed but have not yet commenced. |
| (6) | The following assets are subject to ground leases: |
| Multifamily Asset | Ground Lease Expiration Date | |
| The Alaire | 3/27/2107 | |
| The Terano | 8/5/2112 | |
| (7) | The following asset contains space that is held for development or not otherwise available for lease. This out-of-service square footage is excluded from area, leased, and occupancy metrics in the above table. |
| Multifamily Asset | In-Service | Not Available for Lease | |||
| The Terano | 195,864 | 3,904 | |||
| (8) | Ownership percentage reflects expected dilution of JBG SMITH's real estate venture partner as contributions are funded during the construction of the asset. As of December 31, 2018, JBG SMITH's ownership interest was 88.1%. |
| Page 15 | |
| PROPERTY TABLE - UNDER CONSTRUCTION | DECEMBER 31, 2018 (Unaudited) |
| dollars in thousands, except per square foot data | % Ownership | Estimated Square Feet | % Pre-Leased | Weighted Average Pre-Lease Rent Per Square Foot (1) | Estimated Number of Units | Schedule (2) | At JBG SMITH Share | |||||||||||||||||||
| Construction Start Date | Estimated Completion Date | Estimated Stabilization Date | Historical Cost (3) | Estimated Incremental Investment | Estimated Total Investment | |||||||||||||||||||||
| Asset | Submarket | |||||||||||||||||||||||||
| Commercial | ||||||||||||||||||||||||||
| DC | ||||||||||||||||||||||||||
1900 N Street (4) | CBD | 55.0% | 271,433 | 65.2 | % | $ | 85.80 | — | Q2 2017 | Q2 2020 | Q4 2022 | $ | 99,894 | $ | 23,995 | $ | 123,889 | |||||||||
| L'Enfant Plaza Office - Southeast | Southwest | 49.0% | 215,185 | 74.3 | % | 54.58 | — | Q1 2017 | Q3 2019 | Q2 2021 | 42,706 | 4,536 | 47,242 | |||||||||||||
| VA | ||||||||||||||||||||||||||
1770 Crystal Drive (5) (6) | National Landing | 100.0% | 271,572 | 2.7 | % | 56.43 | — | Q4 2018 | Q2 2021 | Q2 2021 | 43,306 | 76,636 | 119,942 | |||||||||||||
Central District Retail (6) | National Landing | 100.0% | 108,825 | 45.0 | % | 37.90 | — | Q4 2018 | Q2 2021 | Q4 2021 | 14,022 | 103,104 | 117,126 | |||||||||||||
| MD | ||||||||||||||||||||||||||
4747 Bethesda Avenue (7) | Bethesda CBD | 100.0% | 291,414 | 77.7 | % | 61.19 | — | Q2 2017 | Q4 2019 | Q2 2021 | 103,147 | 57,473 | 160,620 | |||||||||||||
| Total/weighted average | 1,158,429 | 53.5 | % | $ | 64.61 | — | Q4 2017 | Q3 2020 | Q3 2021 | $ | 303,075 | $ | 265,744 | $ | 568,819 | |||||||||||
| Multifamily | ||||||||||||||||||||||||||
| DC | ||||||||||||||||||||||||||
| West Half | Ballpark/Southeast | 100.0% | 388,174 | — | — | 465 | Q1 2017 | Q1 2020 | Q1 2021 | 163,221 | 65,148 | 228,369 | ||||||||||||||
965 Florida Avenue (8) | U Street/Shaw | 96.1% | 336,092 | — | — | 433 | Q4 2017 | Q4 2020 | Q1 2022 | 48,358 | 104,261 | 152,619 | ||||||||||||||
| Atlantic Plumbing C | U Street/Shaw | 100.0% | 225,531 | — | — | 256 | Q1 2017 | Q4 2019 | Q3 2020 | 124,399 | 34,254 | 158,653 | ||||||||||||||
| MD | ||||||||||||||||||||||||||
| 7900 Wisconsin Avenue | Bethesda CBD | 50.0% | 359,025 | — | — | 322 | Q2 2017 | Q3 2020 | Q4 2021 | 44,461 | 49,954 | 94,415 | ||||||||||||||
| Total/weighted average | 1,308,822 | — | — | 1,476 | Q2 2017 | Q2 2020 | Q2 2021 | $ | 380,439 | $ | 253,617 | $ | 634,056 | |||||||||||||
Under Construction - Total / Weighted Average (9) | 2,467,251 | 53.5 | % | $ | 64.61 | 1,476 | Q3 2017 | Q2 2020 | Q2 2021 | $ | 683,514 | $ | 519,361 | $ | 1,202,875 | |||||||||||
Under Construction - Total / Weighted Average at JBG SMITH Share (9) | 2,042,866 | 49.5 | % | $ | 62.72 | 1,298 | ||||||||||||||||||||
| Commercial | Multifamily | Total | ||||||||||||||||||||||||
| Weighted average targeted NOI yield at JBG SMITH share: | ||||||||||||||||||||||||||
Estimated total project cost (10) | 6.5 | % | 6.4 | % | 6.4 | % | Consol | 440,876 | ||||||||||||||||||
| Estimated total investment | 6.4 | % | 6.0 | % | 6.2 | % | Unconsol | 78,485 | ||||||||||||||||||
| Estimated incremental investment | 13.7 | % | 15.0 | % | 14.3 | % | ||||||||||||||||||||
| Estimated Initial Full Year Stabilized NOI at JBG SMITH Share (dollars in millions) | $ | 36.3 | $ | 37.9 | $ | 74.2 | ||||||||||||||||||||
____________________
Note: At 100% share, unless otherwise noted.
| (1) | Based on leases signed as of December 31, 2018 and calculated as contractual monthly base rent before free rent, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to contractual monthly base rent. |
| (2) | Average dates are weighted by JBG SMITH share of estimated square feet. |
| (3) | Historical cost excludes certain GAAP adjustments, such as capitalized payroll, interest and ground lease costs. See definition of historical cost on page 22. |
| (4) | Ownership percentage reflects expected dilution of JBG SMITH as contributions are funded during the construction of the asset. As of December 31, 2018, JBG SMITH's ownership interest was 68.5%. |
| (5) | Amazon has executed a lease for 258,299 square feet at 1770 Crystal Drive. With this lease, the asset is 97.8% pre-leased and the pre-leased status of the total under construction portfolio is 75.8% (77.4% at our share). |
| (6) | Historical cost of 1770 Crystal Drive and Central District Retail includes $4.4 million and $4.3 million of prior design costs not related to the current planned development. |
| (7) | Includes JBG SMITH’s lease for approximately 84,400 square feet. |
| (8) | Ownership percentage reflects expected dilution of JBG SMITH's real estate venture partner as contributions are funded during the construction of the asset. As of December 31, 2018, JBG SMITH's ownership interest was 88.1%. |
| (9) | Multifamily assets are excluded from the percent pre-leased and the weighted average pre-lease rent per square foot metrics. |
| (10) | Estimated total project cost is estimated total investment excluding purchase price allocation adjustments recognized as a result of the Formation Transaction. |
| Page 16 | |
| PROPERTY TABLE - FUTURE DEVELOPMENT | DECEMBER 31, 2018 (Unaudited) |
| dollars in thousands, except per square foot data, at JBG SMITH share | Estimated Commercial SF / Multifamily Units to be Replaced (1) | Estimated Capitalized Cost of SF / Units to Be Replaced (4) | Estimated Capitalized Cost of Ground Rent Payments (5) | Estimated Total Investment per SF | ||||||||||||||||||||||||||||||||||||||
| Number of Assets | Estimated Remaining Acquisition Cost (3) | Estimated Total Investment | ||||||||||||||||||||||||||||||||||||||||
| Estimated Potential Development Density (SF) | Historical Cost (2) | |||||||||||||||||||||||||||||||||||||||||
| Region | Total | Office | Multifamily | Retail | ||||||||||||||||||||||||||||||||||||||
| Owned | ||||||||||||||||||||||||||||||||||||||||||
| DC | ||||||||||||||||||||||||||||||||||||||||||
| DC | 8 | 1,678,400 | 312,100 | 1,357,300 | 9,000 | — | $ | 106,283 | N/A | $ | — | $ | — | $ | 106,283 | $ | 63.32 | |||||||||||||||||||||||||
| VA | ||||||||||||||||||||||||||||||||||||||||||
National Landing (6) | 15 | 11,038,400 | 7,551,200 | 3,341,700 | 145,500 | 229,459 SF | 311,572 | N/A | 41,733 | — | 353,305 | 32.01 | ||||||||||||||||||||||||||||||
| Reston | 5 | 3,483,200 | 1,299,800 | 1,971,400 | 212,000 | 15 units | 76,098 | N/A | 3,056 | — | 79,154 | 22.72 | ||||||||||||||||||||||||||||||
| Other VA | 4 | 220,600 | 88,200 | 121,300 | 11,100 | 21,544 SF | 2,086 | N/A | 4,515 | 2,480 | 9,081 | 41.17 | ||||||||||||||||||||||||||||||
| 24 | 14,742,200 | 8,939,200 | 5,434,400 | 368,600 | 251,003 SF / 15 units | 389,756 | N/A | 49,304 | 2,480 | 441,540 | 29.95 | |||||||||||||||||||||||||||||||
| MD | ||||||||||||||||||||||||||||||||||||||||||
| Silver Spring | 1 | 1,276,300 | — | 1,156,300 | 120,000 | 170 units | 15,060 | N/A | 31,600 | — | 46,660 | 36.56 | ||||||||||||||||||||||||||||||
| Greater Rockville | 4 | 126,500 | 19,200 | 88,600 | 18,700 | — | 3,630 | N/A | — | 664 | 4,294 | 33.94 | ||||||||||||||||||||||||||||||
| 5 | 1,402,800 | 19,200 | 1,244,900 | 138,700 | 170 units | 18,690 | N/A | 31,600 | 664 | 50,954 | 36.32 | |||||||||||||||||||||||||||||||
| Total / weighted average | 37 | 17,823,400 | 9,270,500 | 8,036,600 | 516,300 | 251,003 SF / 185 units | $ | 514,729 | N/A | $ | 80,904 | $ | 3,144 | $ | 598,777 | $ | 33.59 | |||||||||||||||||||||||||
Optioned (7) | ||||||||||||||||||||||||||||||||||||||||||
| DC | ||||||||||||||||||||||||||||||||||||||||||
| DC | 3 | 1,793,600 | 78,800 | 1,498,900 | 215,900 | — | $ | 18,724 | $ | 25,051 | $ | — | $ | 71,113 | $ | 114,888 | $ | 64.05 | ||||||||||||||||||||||||
| VA | ||||||||||||||||||||||||||||||||||||||||||
| Other VA | 1 | 11,300 | — | 10,400 | 900 | — | 76 | 995 | — | — | 1,071 | 94.78 | ||||||||||||||||||||||||||||||
| Total / weighted average | 4 | 1,804,900 | 78,800 | 1,509,300 | 216,800 | — | $ | 18,800 | $ | 26,046 | $ | — | $ | 71,113 | $ | 115,959 | $ | 64.25 | ||||||||||||||||||||||||
| Total / Weighted Average | 41 | 19,628,300 | 9,349,300 | 9,545,900 | 733,100 | 251,003 SF / 185 units | $ | 533,529 | $ | 26,046 | $ | 80,904 | $ | 74,257 | $ | 714,736 | $ | 36.41 | ||||||||||||||||||||||||
____________________
| (1) | Represents management's estimate of the total office and/or retail rentable square feet and multifamily units that would need to be redeveloped to access some of the estimated potential development density. |
| (2) | Historical cost includes certain intangible assets, such as option and transferable density rights values; and excludes certain GAAP adjustments, such as capitalized payroll, interest and ground lease costs. See definition of historical cost on page 22. |
| (3) | Represents management's estimate of remaining deposits, option payments, and option strike prices as of December 31, 2018. |
| (4) | Capitalized value of estimated commercial square feet / multifamily units to be replaced, which generated approximately $1.2 million of NOI for the three months ended December 31, 2018 (included in the NOI of the applicable operating segment), at a 6.0% capitalization rate. |
| (5) | Capitalized value of stabilized annual ground rent payments associated with leasehold assets at a 5.0% capitalization rate. Two owned parcels and one optioned parcel are leasehold interests with estimated annual stabilized ground rent payments totaling $3.7 million. |
| (6) | Includes 4.1 million square feet of estimated potential development density that JBG SMITH has sold to Amazon pursuant to executed purchase and sale agreements. Subject to customary closing conditions, Amazon will pay $294 million for the assets. |
| (7) | As of December 31, 2018, the weighted average remaining term for the optioned future development assets is 5.5 years. |
| Page 17 | |
| LEASE EXPIRATIONS | DECEMBER 31, 2018 (Unaudited) |
| At JBG SMITH Share | ||||||||||||||||||||||||
| Year of Lease Expiration | Number of Leases | Square Feet | % of Total Square Feet | Annualized Rent (in thousands) | % of Total Annualized Rent | Annualized Rent Per Square Foot | Estimated Annualized Rent Per Square Foot at Expiration (1) | |||||||||||||||||
| Month-to-Month | 58 | 268,723 | 2.8 | % | $ | 10,859 | 2.6 | % | $ | 40.41 | $ | 40.41 | ||||||||||||
| 2019 | 136 | 779,695 | 8.0 | % | 33,120 | 7.8 | % | 42.48 | 42.79 | |||||||||||||||
| 2020 | 141 | 1,136,248 | 11.7 | % | 48,307 | 11.4 | % | 42.51 | 43.64 | |||||||||||||||
| 2021 | 117 | 914,267 | 9.4 | % | 42,240 | 9.9 | % | 46.20 | 48.78 | |||||||||||||||
| 2022 | 97 | 1,334,682 | 13.7 | % | 58,200 | 13.7 | % | 43.61 | 45.20 | |||||||||||||||
| 2023 | 89 | 561,432 | 5.8 | % | 23,483 | 5.5 | % | 41.83 | 45.91 | |||||||||||||||
| 2024 | 81 | 933,791 | 9.6 | % | 43,036 | 10.1 | % | 46.09 | 50.73 | |||||||||||||||
| 2025 | 47 | 386,267 | 4.0 | % | 14,634 | 3.4 | % | 37.89 | 42.58 | |||||||||||||||
| 2026 | 56 | 320,468 | 3.3 | % | 13,649 | 3.2 | % | 42.59 | 49.99 | |||||||||||||||
| 2027 | 44 | 427,730 | 4.4 | % | 18,278 | 4.3 | % | 42.73 | 51.25 | |||||||||||||||
| Thereafter | 107 | 2,651,778 | 27.3 | % | 118,979 | 28.1 | % | 44.87 | 57.53 | |||||||||||||||
| Total / Weighted Average | 973 | 9,715,081 | 100.0 | % | $ | 424,785 | 100.0 | % | $ | 43.72 | $ | 49.29 | ||||||||||||
____________________
Note: Includes all in-place leases as of December 31, 2018 for office and retail space within JBG SMITH's operating portfolio and assuming no exercise of renewal options or early termination rights. The weighted average remaining lease term for the entire portfolio is 6.2 years. The weighted average lease term for the National Landing portfolio is 5.2 years.
| (1) | Represents monthly base rent before free rent, plus tenant reimbursements, as of lease expiration multiplied by 12 and divided by square feet. Triple net leases are converted to a gross basis by adding tenant reimbursements to monthly base rent. Tenant reimbursements at lease expiration are estimated by escalating tenant reimbursements as of December 31, 2018, or management’s estimate thereof, by 2.75% annually through the lease expiration year. |
| Page 18 | |
| DEBT SUMMARY | DECEMBER 31, 2018 (Unaudited) |
| dollars in thousands, at JBG SMITH share | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | ||||||||||||||||||||||
| Consolidated and Unconsolidated Principal Balance | |||||||||||||||||||||||||||||
| Unsecured Debt: | |||||||||||||||||||||||||||||
| Revolving credit facility ($1 billion commitment) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Term loans ($400 million commitment) | — | — | — | — | 100,000 | 200,000 | 300,000 | ||||||||||||||||||||||
| Total unsecured debt | — | — | — | — | 100,000 | 200,000 | 300,000 | ||||||||||||||||||||||
| Secured Debt: | |||||||||||||||||||||||||||||
| Consolidated principal balance | 182,467 | 97,141 | 331,881 | 327,500 | 177,736 | 727,927 | 1,844,652 | ||||||||||||||||||||||
| Unconsolidated principal balance | 118,738 | 41,077 | — | 74,270 | 20,693 | 44,612 | 299,390 | ||||||||||||||||||||||
| Total secured debt | 301,205 | 138,218 | 331,881 | 401,770 | 198,429 | 772,539 | 2,144,042 | ||||||||||||||||||||||
Total Consolidated and Unconsolidated Principal Balance | $ | 301,205 | $ | 138,218 | $ | 331,881 | $ | 401,770 | $ | 298,429 | $ | 972,539 | $ | 2,444,042 | |||||||||||||||
| % of total debt maturing | 12.3 | % | 5.7 | % | 13.6 | % | 16.4 | % | 12.2 | % | 39.8 | % | 100.0 | % | |||||||||||||||
% floating rate (1) | 100.0 | % | 20.5 | % | 38.1 | % | — | — | 21.5 | % | 27.2 | % | |||||||||||||||||
% fixed rate (2) | — | % | 79.5 | % | 61.9 | % | 100.0 | % | 100.0 | % | 78.5 | % | 72.8 | % | |||||||||||||||
| Weighted Average Interest Rates | |||||||||||||||||||||||||||||
| Variable rate | 5.07 | % | 6.14 | % | 3.56 | % | — | — | 4.06 | % | 4.51 | % | |||||||||||||||||
| Fixed rate | — | 3.32 | % | 4.19 | % | 3.94 | % | 4.49 | % | 4.18 | % | 4.13 | % | ||||||||||||||||
| Total Weighted Average Interest Rates | 5.07 | % | 3.90 | % | 3.95 | % | 3.94 | % | 4.49 | % | 4.16 | % | 4.23 | % | |||||||||||||||
| Credit Facility | |||||||||||||||||||||||||||||
| Revolving Credit Facility | Tranche A-1 Term Loan | Tranche A-2 Term Loan | Total/Weighted Average | 2,144,652 | |||||||||||||||||||||||||
| Credit limit | $ | 1,000,000 | $ | 200,000 | $ | 200,000 | $ | 1,400,000 | 2.12 | % | |||||||||||||||||||
| Outstanding principal balance | $ | — | $ | 100,000 | $ | 200,000 | $ | 300,000 | |||||||||||||||||||||
| Letters of credit | $ | 5,743 | $ | — | $ | — | $ | 5,743 | |||||||||||||||||||||
| Undrawn capacity | $ | 994,257 | $ | 100,000 | $ | — | $ | 1,094,257 | |||||||||||||||||||||
Interest rate spread (3) | 1.10 | % | 1.20 | % | 1.55 | % | 1.43 | % | |||||||||||||||||||||
All-In interest rate (4) | 3.60 | % | 3.32 | % | 4.05 | % | 3.81 | % | |||||||||||||||||||||
| Initial maturity date | Jul-21 | Jan-23 | Jul-24 | — | |||||||||||||||||||||||||
| Delayed draw availability period | — | Jul-19 | — | — | |||||||||||||||||||||||||
____________________
| (1) | Floating rate debt includes floating rate loans with interest rate caps. |
| (2) | Fixed rate debt includes floating rate loans with interest rate swaps. |
| (3) | The interest rate for the revolving credit facility excludes a 0.15% facility fee. |
| (4) | The all-in interest rate is inclusive of interest rate swaps. As of December 31, 2018, only the $100 million outstanding balance on the Tranche A-1 Term Loan had been swapped. |
| Page 19 | |
| DEBT BY INSTRUMENT | DECEMBER 31, 2018 (Unaudited) |
dollars in thousands Asset | % Ownership | Principal Balance | Stated Interest Rate | Interest Rate Hedge | Current Annual Interest Rate (1) | Initial Maturity Date | Extended Maturity Date (2) | ||||||
| Consolidated | |||||||||||||
| Courthouse Plaza 1 and 2 | 100.0 | % | — | L + 1.60% | — | 4.10 | % | 05/10/19 | 05/10/20 | ||||
| RTC - West | 100.0 | % | 97,141 | L + 1.50% | Swap | 3.33 | % | 04/12/20 | 04/12/21 | ||||
| WestEnd25 | 100.0 | % | 97,881 | 4.88% | Fixed | 4.88 | % | 06/01/21 | 06/01/21 | ||||
| Universal Buildings | 100.0 | % | 182,467 | L + 1.90% | Cap | 4.40 | % | 08/12/19 | 08/12/21 | ||||
| The Bartlett | 100.0 | % | 220,000 | L + 1.70% | Swap | 3.79 | % | 06/20/22 | 06/20/22 | ||||
| Credit Facility - Revolving Credit Facility | 100.0 | % | — | L + 1.10% | — | 3.60 | % | 07/16/21 | 07/16/22 | ||||
| Credit Facility -Tranche A-1 Term Loan | 100.0 | % | 100,000 | L + 1.20% | Swap | 3.32 | % | 01/18/23 | 01/18/23 | ||||
| 2121 Crystal Drive | 100.0 | % | 136,728 | 5.51% | Fixed | 5.51 | % | 03/01/23 | 03/01/23 | ||||
| Falkland Chase - South & West | 100.0 | % | 41,008 | 3.78% | Fixed | 3.78 | % | 06/01/23 | 06/01/23 | ||||
CEB Tower at Central Place (3) | 100.0 | % | 234,000 | L + 1.65% | Swap | 3.56 | % | 11/07/21 | 11/07/23 | ||||
| 800 North Glebe Road | 100.0 | % | 107,500 | L + 1.60% | Swap | 3.60 | % | 06/30/22 | 06/30/24 | ||||
| Credit Facility - Tranche A-2 Term Loan | 100.0 | % | 200,000 | L + 1.55% | — | 4.05 | % | 07/18/24 | 07/18/24 | ||||
| 2101 L Street | 100.0 | % | 137,453 | 3.97% | Fixed | 3.97 | % | 08/15/24 | 08/15/24 | ||||
| 201 12th Street S., 200 12th Street S., and 251 18th Street S. | 100.0 | % | 83,664 | 7.94% | Fixed | 7.94 | % | 01/01/25 | 01/01/25 | ||||
| RiverHouse Apartments | 100.0 | % | 307,710 | L + 1.28% | Swap | 3.47 | % | 04/01/25 | 04/01/25 | ||||
| Fort Totten Square | 100.0 | % | 73,600 | L + 1.35% | Swap | 3.77 | % | 05/18/25 | 05/18/25 | ||||
| 1730 M Street | 100.0 | % | 47,500 | L + 1.25% | Swap | 3.92 | % | 12/21/25 | 12/21/25 | ||||
| 1235 S. Clark Street | 100.0 | % | 78,000 | 3.94% | Fixed | 3.94 | % | 11/01/27 | 11/01/27 | ||||
| Total Consolidated Principal Balance | 2,144,652 | ||||||||||||
| Premium / (discount) recognized as a result of the Formation Transaction | 1,266 | ||||||||||||
| Deferred financing costs - mortgage loans | (7,564 | ) | 1,569,918 | ||||||||||
| Deferred financing costs - credit facility | (7,650 | ) | 1,060,951 | ||||||||||
| Total Consolidated Indebtedness | $ | 2,130,704 | 1,369,918 | ||||||||||
| Page 20 | |
| DEBT BY INSTRUMENT | DECEMBER 31, 2018 (Unaudited) |
dollars in thousands Asset | % Ownership | Principal Balance | Stated Interest Rate | Interest Rate Hedge | Current Annual Interest Rate (1) | Initial Maturity Date | Extended Maturity Date (2) | ||||||
| Unconsolidated | |||||||||||||
| 11333 Woodglen Drive | 18.0 | % | 12,802 | L + 1.90% | Swap | 3.52 | % | 01/01/20 | 01/01/20 | ||||
| Galvan | 1.8 | % | 89,500 | L + 1.75% | Cap | 4.25 | % | 03/06/20 | 03/06/21 | ||||
| Rosslyn Gateway - North, Rosslyn Gateway - South | 18.0 | % | 48,390 | L + 2.00% | Cap | 3.00 | % | 11/17/19 | 11/17/21 | ||||
| The Foundry | 9.9 | % | 56,545 | L + 1.85% | Cap | 4.35 | % | 12/12/19 | 12/12/21 | ||||
L'Enfant Plaza Office - North, L'Enfant Plaza Office - East, L'Enfant Plaza Retail (4) | 49.0 | % | 213,162 | L + 3.65% | — | 6.46 | % | 05/08/19 | 05/08/22 | ||||
| L'Enfant Plaza Office - Southeast | 49.0 | % | 54,497 | L + 3.75% | Cap | 6.25 | % | 05/08/20 | 05/08/22 | ||||
| Atlantic Plumbing | 64.0 | % | 100,000 | L + 1.50% | Swap | 5.08 | % | 11/08/22 | 11/08/22 | ||||
| Stonebridge at Potomac Town Center | 10.0 | % | 104,606 | L + 1.70% | Swap | 3.25 | % | 12/10/20 | 12/10/22 | ||||
| The Alaire | 18.0 | % | 48,000 | L + 1.82% | Cap | 4.32 | % | 03/01/25 | 03/01/25 | ||||
| 1101 17th Street | 55.0 | % | 60,000 | L + 1.25% | Swap | 4.13 | % | 06/13/25 | 06/13/25 | ||||
| Fairway Apartments | 10.0 | % | 47,293 | L + 1.50% | Swap | 3.60 | % | 07/01/22 | 07/01/25 | ||||
| 7900 Wisconsin Avenue | 50.0 | % | — | 4.82% | Fixed | 4.82 | % | 07/15/25 | 07/15/25 | ||||
| The Gale Eckington | 5.0 | % | 110,813 | L + 1.60% | Swap | 3.56 | % | 07/31/22 | 07/31/25 | ||||
| Pickett Industrial Park | 10.0 | % | 23,600 | L + 1.45% | Swap | 3.56 | % | 09/04/25 | 09/04/25 | ||||
| The Terano | 1.8 | % | $ | 34,000 | L + 1.35% | Swap | 4.45 | % | 11/08/25 | 11/08/25 | |||
| Wardman Park | 16.7 | % | 124,158 | 4.77% | Fixed | 4.77 | % | 02/01/23 | 02/01/28 | ||||
| Total Unconsolidated Principal Balance | 1,127,366 | ||||||||||||
| Deferred financing costs | (1,998 | ) | |||||||||||
| Total Unconsolidated Indebtedness | $ | 1,125,368 | |||||||||||
| Principal Balance at JBG SMITH Share | |||||||||||||
| Consolidated principal balance at JBG SMITH share | $ | 2,144,652 | |||||||||||
| Unconsolidated principal balance at JBG SMITH share | 299,390 | 2 | % | ||||||||||
| Total Consolidated and Unconsolidated Principal Balance at JBG SMITH Share | $ | 2,444,042 | |||||||||||
| Indebtedness at JBG SMITH Share (net of premium / (discount) and deferred financing costs) | |||||||||||||
| Consolidated indebtedness at JBG SMITH Share | $ | 2,130,704 | |||||||||||
| Unconsolidated indebtedness at JBG SMITH Share | 298,588 | ||||||||||||
| Total Consolidated and Unconsolidated Indebtedness at JBG SMITH Share | $ | 2,429,292 | 2.43 | ||||||||||
____________________
| (1) | December 31, 2018 one-month LIBOR of 2.50% applied to loans which are denoted as floating (no swap) or floating with a cap, except as otherwise noted. |
| (2) | Represents the maturity date based on execution of all extension options. Many of these extensions are subject to lender covenant tests. |
| (3) | The notional amount of the CEB Tower at Central Place interest rate swap as of December 31, 2018 was $107.5 million. |
| (4) | The base rate for this loan is three-month LIBOR, which was 2.81% as of December 31, 2018. |
| Page 21 | |
| DEFINITIONS | DECEMBER 31, 2018 |
Annualized Rent
“Annualized rent” is defined as (i) for commercial assets, or the retail component of a mixed-use asset, the in-place monthly base rent before free rent, plus tenant reimbursements as of December 31, 2018, multiplied by 12, with triple net leases converted to a gross basis by adding estimated tenant reimbursements to monthly base rent, and (ii) for multifamily assets, or the multifamily component of a mixed-use asset, the in-place monthly base rent before free rent as of December 31, 2018, multiplied by 12. Annualized rent excludes rent from signed but not yet commenced leases.
Annualized Rent Per Square Foot
“Annualized rent per square foot” is defined as (i) for commercial assets, annualized office rent divided by occupied office square feet and annualized retail rent divided by occupied retail square feet; and (ii) for multifamily assets, monthly multifamily rent divided by occupied multifamily square feet; annualized retail rent and retail square feet are excluded from this metric. Occupied square footage may differ from leased square footage because leased square footage includes leases that have been signed but have not yet commenced.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and Adjusted EBITDA
Management uses EBITDA and EBITDAre, non-GAAP financial measures, as supplemental operating performance measures and believes they help investors and lenders meaningfully evaluate and compare our operating performance from period-to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). EBITDAre is computed in accordance with the definition established by NAREIT. NAREIT defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, gains on sales of real estate and impairment losses of real estate, including our share of such adjustments of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.
“Adjusted EBITDA,” a non-GAAP financial measure, represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as transaction and other costs, gain (loss) on the extinguishment of debt, distributions in excess of our net investment in consolidated real estate ventures, gain on the bargain purchase of a business, lease liability adjustments and share-based compensation expense related to the Formation Transaction and special equity awards. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.
Because EBITDA, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results. A reconciliation of net income (loss) to EBITDA, EBITDAre and Adjusted EBITDA is presented on page 7.
Estimated Potential Development Density
‘‘Estimated potential development density’’ reflects management’s estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of December 31, 2018. Our current business plans may contemplate development of less than the maximum potential development density for individual assets. As market conditions change, our business plans, and therefore, the Estimated Potential Development Density, could change accordingly. Given timing, zoning requirements and other factors, we make no assurance that estimated potential development density amounts will become actual density to the extent we complete development of assets for which we have made such estimates.
Free Rent
‘‘Free rent’’ means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).
Future Development
“Future development” refers to assets that are development opportunities on which we do not intend to commence construction within 18 months of December 31, 2018 where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into a leasehold interest with respect to land.
Historical Cost, Estimated Incremental Investment, Estimated Total Investment and Estimated Total Project Cost
“Historical cost” is a non-GAAP measure which includes the total historical cost incurred by JBG SMITH with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements (excluding free rent converted to tenant improvement allowances), leasing costs and other similar costs, but excluding any financing costs, ground rent expenses and capitalized payroll costs incurred as of December 31, 2018.
“Estimated incremental investment” means management’s estimate of the remaining cost to be incurred in connection with the development of an asset as of December 31, 2018, including all remaining acquisition costs, hard costs, soft costs, tenant improvements (excluding free rent converted to tenant improvement allowances), leasing costs and other similar costs to develop and stabilize the asset but excluding any financing costs, ground rent expenses and capitalized payroll costs.
“Estimated total investment” means, with respect to the development of an asset, the sum of the historical cost in such asset and the estimated incremental investment for such asset.
"Estimated total project cost" is estimated total investment excluding purchase price allocation adjustments recognized as a result of the Formation Transaction.
Actual incremental investment, actual total investment and actual total project cost may differ substantially from our estimates due to numerous factors, including unanticipated expenses, delays in
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the estimated start and/or completion date, changes in design and other contingencies.
In Service
‘‘In service’’ refers to commercial or multifamily assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of December 31, 2018.
Metro-Served
“Metro-served” means locations, submarkets or assets that are generally nearby and within walking distance of a Metro station, defined as being within 0.5 miles of an existing or planned Metro station.
Monthly Rent Per Unit
For multifamily assets, represents multifamily rent for the month ended December 31, 2018 divided by occupied units; retail rent is excluded from this metric.
Near-Term Development
‘‘Near-term development’’ refers to assets that have substantially completed the entitlement process and on which we intend to commence construction within 18 months following December 31, 2018, subject to market conditions.
Net Operating Income ("NOI"), Adjusted Annualized NOI, Estimated Stabilized NOI and Targeted NOI Yield
“NOI” is a non-GAAP financial measure management uses to measure the operating performance of our assets and consists of property-related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of free rent and payments associated with assumed lease liabilities) less operating expenses and ground rent, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and amortization of acquired above-market leases and below-market ground lease intangibles. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended December 31, 2018 multiplied by four. Due to seasonality in the hospitality business, annualized NOI for Crystal City Marriott represents the trailing twelve-month NOI as of December 31, 2018. Management believes Annualized NOI provides useful information in understanding JBG SMITH’s financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this JBG SMITH Properties Information Package. There can be no assurance that the annualized NOI shown will reflect JBG SMITH’s actual results of operations over any 12-month period. We also report adjusted annualized NOI which includes signed but not yet commenced leases and incremental revenue from recently delivered assets assuming stabilization. While we believe adjusted annualized NOI provides useful information regarding potential future NOI from our assets, it does not account for any decrease in NOI for lease terminations, defaults or other negative events that could affect NOI and therefore, should not be relied upon as indicative of future NOI.
This JBG SMITH Properties Information Package also contains management’s estimate of initial full year stabilized NOI and targeted NOI yields for under construction and near-term development assets, which are based on management’s estimates of property-related revenue and operating expenses for each asset. These estimates are inherently uncertain and represent management’s plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. The property-related revenues and operating expenses for our assets may differ materially from the estimates included in this JBG SMITH Properties Information Package. Management’s projections of NOI yield are not projections of JBG SMITH’s overall financial performance or cash flow, and there can be no assurance that the targeted NOI yield set forth in this JBG SMITH Properties Information Package will be achieved.
“Targeted NOI yield” means our estimated initial full year stabilized NOI reported as a percentage of (i) estimated total project costs, (ii) estimated total investment and/or (iii) estimated incremental investment, as applicable. Actual initial full year stabilized NOI yield may vary from the targeted NOI yield based on the actual incremental investment to complete the asset and its actual initial full year stabilized NOI, and there can be no assurance that we will achieve the targeted NOI yields described in this JBG SMITH Properties Information Package.
As a part of our standard development underwriting process, we analyze the estimated initial full year stabilized NOI yield we expect to derive from each of our development assets and establish a targeted NOI yield. We caution you not to place undue reliance on the targeted NOI yields we present in this JBG SMITH Properties Information Package because they are based solely on our estimates, using data available to us in our development underwriting processes. Our estimated initial full year stabilized NOI, estimated property-related revenue, estimated operating expenses and/or estimated incremental investment may differ substantially from our estimates due to various factors, including unanticipated capital expenditures and other expenses, delays in the estimated start and/or completion date and other contingencies, delays and/or difficulties in completing, leasing and stabilizing these assets, failure to obtain estimated occupancy and rental rates, inability to collect anticipated rental revenues, tenant bankruptcies and unanticipated expenses at these assets that we cannot pass on to tenants. We can provide no assurance that the actual NOI yields we present will be consistent with the targeted NOI yields set forth in this JBG SMITH Properties Information Package.
The Company does not provide reconciliations for non-GAAP estimates on a future basis, including adjusted annualized NOI and estimated initial full year stabilized NOI because it is unable to provide a meaningful or accurate calculation or estimate of reconciling items and the information is not available without unreasonable effort. This inability is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income. Additionally, no reconciliation of targeted NOI yield to the most directly comparable GAAP measure is included in this JBG SMITH Properties Information Package because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measures without unreasonable efforts
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because such data is not currently available or cannot be currently estimated with confidence. Accordingly, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
Management uses each of these measures as supplemental performance measures for its assets and believes they provide useful information to investors because they reflect only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets.
However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of this measure of the operating performance of our assets is limited. Moreover, our method of calculating NOI may differ from other real estate companies and, accordingly, may not be comparable. NOI should be considered only as a supplement to net operating income (loss) (computed in accordance with GAAP) as a measure of the operating performance of our assets.
Percent Leased
‘‘Percent leased’’ is based on leases signed as of December 31, 2018, and is calculated as total rentable square feet less rentable square feet available for lease divided by total rentable square feet expressed as a percentage. Out-of-service square feet are excluded from this calculation.
Percent Pre-Leased
‘‘Percent pre-leased’’ is based on leases signed as of December 31, 2018, and is calculated as the estimated rentable square feet leased divided by estimated total rentable square feet expressed as a percentage.
Percent Occupied
‘‘Percent occupied’’ is based on occupied rentable square feet/units as of December 31, 2018, and is calculated as (i) for office and retail space, total rentable square feet less unoccupied square feet divided by total rentable square feet, (ii) for multifamily space, total units less unoccupied units divided by total units, expressed as a percentage. Out-of-service square feet are excluded from this calculation.
Recently Delivered
“Recently delivered” refers to commercial and multifamily assets that are below 90% leased and have been delivered within the 12 months ended December 31, 2018.
Same Store and Non-Same Store
“Same store” refers to the pool of assets that were in service for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared. No JBG Assets are included in the same store pool for the year ended December 31, 2018.
“Non-same store” refers to all operating assets excluded from the same store pool.
Signed But Not Yet Commenced Leases
“Signed but not yet commenced leases” means leases for assets in JBG SMITH’s portfolio that, as of December 31, 2018, have been executed but for which the contractual lease term had not yet begun, and no rental payments had yet been charged to the tenant.
Square Feet
‘‘Square feet’’ or ‘‘SF’’ refers to the area that can be rented to tenants, defined as (i) for commercial assets, rentable square footage defined in the current lease and for vacant space the rentable square footage defined in the previous lease for that space, (ii) for multifamily assets, management’s estimate of approximate rentable square feet, (iii) for assets under construction and near-term development assets, management’s estimate of approximate rentable square feet based on current design plans as of December 31, 2018, or (iv) for future development assets, management’s estimate of developable gross square feet based on its current business plans with respect to real estate owned or controlled as of December 31, 2018.
Transaction and Other Costs
Transaction and other costs include amounts incurred for transition services provided by our former parent, integration costs, severance costs, costs incurred in connection with recapitalization transactions and disposition and dead deal costs.
Under Construction
‘‘Under construction’’ refers to assets that were under construction during the three months ended December 31, 2018.
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APPENDIX - NOI RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2018 (Unaudited) |
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